Question

Required information Problem 2-7A Complete the steps in the measurement of external transactions (L02-4,2-5, 2-6) [The following information applies to the questions displayed below.) Below are the transactions for Ute Sewing Shop for March, the first month of operations. March 1 Issue common stock in exchange for cash of $2,100. March 3 Purchase sewing equipment by signing a note with the local bank, $1,800 March 5 Pay rent of $510 for March. March 7 Martha, a customer, places an order for alterations to several dresses. Ute estimates that the alterations will cost Martha $710. Martha is not required to pay for the alterations until the work is complete. March 12 Purchase sewing supplies for $121 on account. This material will be used to provide services to customers. March 15 Ute delivers altered dresses to Martha and receives $710. March 19 Ute agrees to alter 18 business suits for Bob, who has lost a significant amount of weight recently. Ute receives $610 from Bob and promises the suits to be completed by March 25. March 25 Ute delivers 10 altered business suits to Bob. March 30 Pay utilities of $86 for the current period. March 31 Pay dividends of $105 to stockholders.

Answer 1

UTE SEWING SHOP Trial Balance March 31 Debit Credit | $2719 $121 $1800 Accounts Cash Supplies Equipment Accounts Payable Defferred Revenue Notes Payable Common Stock Dividends $121 $1800 $ 2100 |$105 Service Revenue Rent Expense Utilities Expense $1320 $ 510 $86 To tals $ 5391 $ 5341 No tes A trial balance is a bookkeeping, of all ledger worksheet in which the balance are compiled in to debit and Credit Column. The totals of trial Balance are equal. It means that the closing balances of all tedger are reflected in trial balance. Theºdebit side of trial balance include assets and expenses while the credit side include Income, liabilities and stockholders Equity. Cash and Equipment are assets and supplies, Rent Expense and D Hilities expenses are expense Sothese along with dividend are posted in debit Columo. Deferred Revenue, Accounts Paya ble and Notes Payable ore liabilities. Common stock ane Pout of stockholden's Equity. So, these are posted on Credit side.

1. Common stock ending balance is $2100 as there is no further issue of Common stock. 3. Purchase of equipment by signing note. So. No tes Payable liabiling becomes $ 1800 and $1800 of Equipment asset. Rent paid is as expense. 14. Amount received as Service Revenue : Amount received from Maratha $710 Amount received from Bob $ 610 $3200 1320 5. Purchase of sewing supplies on account.so. Supplies balance of $121 and Account Payable $121. 6. Utilities Expense of $86 and Dividend of $105. 7. Deferred Revenue balance becomes zero as the income is earned before the end of March 31. 8. Closing cash balance = Receip from stock + Receipt from Bub and Martha as seavice Revenue - Rent- Utilities - Dividende. - $ 2100 + $ 610 + $ 70- $ Slo-$86-$ $ 2719.